Cassandra accepts what she believes was an offer to work for Destination Vacations, Inc., as a chef. In determining whether a contract has been formed, an element of prime importance is

a. the condition of the workplace.

b. the duration of the work.

c. the intent of the parties.

d. the subject of the contract.

Mona asserts that a deal she entered into with Nate is an unenforceable contract. Defenses to the enforcement of a contract include

a. a desire not to perform.

b. adverse economic consequences.

c. rests that do not match expectations.

d. the lack of a party's voluntary consent.

On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. Under the present-day view, these parties had

a. an expired contract when Neil said that he had changed his mind.

b. a quasi contract when Neil aid that he would pay for certain work.

c. a unilateral contract as soon as Outdoor began to perform.

d. no contract.

Flo tells Gregor that she will buy his textbook from last semester for $65. Gregor agrees. Flo and Gregor have

a. an executed contract.

b. an express contract.

c. an implied contract.

d. a quasi contract.

Cameron enters a coffee shop in which she has an one account, fills a cup of coffee, holds it so the cashier can see it, acknowledges the cashier's nod, and walks out with the coffee, knowing that she will be billed for it at thee end of the month. Cameron has formed

a. an express contract.

b. an implied contract.

c. no contract.

d. a quasi contract.

Cole drives into Dino's Service Station and asks Erin, the attendant, to fill the tank in Cole's sport utility vehicle. After Erin fills the tank, but before Cole pays for the gas, any contract between Cole nd Dino's is

a. executed

b. executory

c. quasi

d. unenforceable

Vernon claims that his contract with Ulani for catering services is voidable. If their contract is avoided

a. both parties are released from it.

b. both parties must fully perform their obligations under it.

c. a wholly different contract is agreed to.

d. a wholly different contract is imposed "as if" the parties had agreed.

Mia, a physician, renders aid to Noel, who is injured and unconscious. Mia can recover the cost of the aid from Noel

a. even if Noel was not aware of the aid.

b. only if Noel recovers because of the aid.

c. only if Noel was aware of the aid.

d. under no circumstances.

Green Grocers, Inc., enters into a contract with Hiway Transport Company for he delivery of a shipment of fresh produce. In a later dispute between these parties over the delivery, the doctrine of quasi contract cannot be used because

a. both of the parties involved are businesses.

b. at least one of the parties had greater bargaining power.

c. the subject of the contract was a service.

d. there is an actual contract covering the subject in dispute.

Cory enters into a contract with Diane to act as her personal sports trainer. If they later dispute the meaning, and the contract contains unclear terms, the rules of contract interpretation will give effect to

a. the parties' intent as expressed in their contract.

b. what the defendant claims was the parties' intent.

c. what the plaintiff claims was the parties' intent.

d. what the parties now agree they intended.

T/F: An offer must be practical to be effective.

T/F: An invitation to negotiate - "can you afford this?" - is an offer.

T/F: A price list is an offer.

T/F: A contract lacking a quantity term, when appropriate, may not be enforceable.

T/F: A counteroffer does not terminate but continue an offer.

T/F: An unequivocal acceptance operates as a rejection of the original offer.

T/F: If an offeror does not expressly authorize a certain mode of acceptance, then acceptance may be made by any reasonable means.

T/F: Terms in a shrink-wrap agreement have been enforced in the same way as the terms of other contracts.

T/F: The UETA covers only e-records and e-signatures relating to a transaction.

T/F: The UETA applies to all writings and signatures.

Fanny tells Eden that she will sign a lease if it includes a clause permitting Fanny to extend the lease at the same amount of rent. Fanny's intent to sign the lease is determined by reference to Fanny's

a. assumptions

b. beliefs

c. unspoken opinions

d. words and action.

Consumer Sales, Inc.(CSI), sends its catalogue to Dean and includes a “person­alized” letterinviting him to buy any item in the catalogueat the advertised price. This is

a. an offer because of the "personalized" letter.

b. an offer because there is no room for price negotiation.

c. an offer only if Dean previously bought items from CSI.

d. not an offer.

Quick Transport, Inc.,offers to sell a truckload of palettes to Rapid Delivery Company. Beforeaccepting the offer, Rapid learns that thepalettes have been sold to Speedy Trucking Corporation. Quick is

StateBank offers to lend money to Rodeo Promotions, Inc., at 15 percent interest.Before Rodeo accepts, a statute is enacted prohibitingloans at interest rates greater than 12 percent. Rodeo and the bank have

a. have a contract for a loan at 15 percent interest.

b. have a contract for a loan a 12 percent interest.

c. have a contract for a loan at 0 percent interest.

d. no contract for a loan.

Deepwater Mining Corporation offers to sell EastChina Refining, Inc., a certain quantity of unrefined oil. If East China sendsan acceptance via Deepwater’sauthorized mode of communication, it will be effective when it is

a. in transit.

b. received.

c. sent.

d. written.

Deb buys a song througheSongs, an online music vendor. Before completing the purchase and downloadingthe song, Deb must agree toa provision not to make and sell copies of the song. This provision is

a. a browse-wrap term.

b. a click-on agreement.

c. a shrink-wrap agreement.

d. a choice-of-law clause.

Howie enters into acontract with Ida over the Internet to buy soybeans as a hedge against fallingprices in corn. Neither party prints outa hard copy. Under the Electronic Signatures in Global and National Commerce Act (E-SIGN Act),this contract can

a. be "denied legal effect" if it falls under the UCC's Statute of Frauds.

b. be "denied legal effect" unless a hard copy is printed.

c. be "denied legal effect" until it is executed.

d. not be "denied legal effect" because it is only in electronic form.

Shelby offers to makedigital copies of Relay Company’s business conference videotapes, CDs, DVDs,and other media for $500. Under themailbox rule and the Uniform Electronic Transactions Act (UETA), Relay’sacceptance by e-mail will be considered effectivewhen

a. received.

b. sent.

c. followed up b a confirmation letter sent by regular mail.

d. composed on a Relay computer.

Beyond-the-Sea Corporation and Homeport Companymake a deal for Homeport’s products, via e-records. Under the UETA, an e-record is considered sentwhen it

a. is signed and encrypted, and will be sent without changes.

b. is stored in the sender's back-up system.

c. is composed on the sender's computer.

d. leaves the sender's control.

T/F: A bargained-for exchange is one of the elements of consideration.

T/F: A promise to do something that one has a prior legal duty to do is not consideration.

T/F: A promise to pay for an act that has already occurred is enforceable because the event is certain.

T/F: A minor may disaffirm a contract only if the subject matter is illegal.

T/F: A person who enters into a contract when he or she is intoxicated can void the contract if the terms are obviously favorable to the other party.

T/F: If there is a statute that prohibits a certain action, a contract to do it is unenforceable.

T/F: A covenant not to compete in the sale of an ongoing business is unenforceable.

T/F: An illegal contract is valid if he parties to it were unaware of the illegality.

Brad defends against a breach-of-contract suit by College CreditCorporation by claiming that their deal—a student loan accruing interest at acertain rate and payable beginning on a certain date—was unfair because theconsideration for their contract was inadequate. Referto Fact Pattern 10-1.“Adequacy”of consideration refers to

a. "How much" consideration is given.

b. legally sufficient value in the eyes of the law.

c. the intangible value to a contracting party of a thing exchanged.

d. the substantiality of the consideration exchanged.

BakedGoods Company agrees to supply Comida Café with all the corn chips that it re­quiresfor a year. A sudden demand for ethanol results in a shortage of corn, and theprice rises sharply. Baked Goods asks Comida to pay a higher price for thechips. This request is

a. invalid as an attempt at extortion or the so-called holdup game.

b. invalid under the preexisting duty rule.

c. valid as a risk ordinarily assumed in business.

d. valid due to the unforeseen difficulty of the sudden price increase.

Dex and Carmen are in an autoaccident. Dex offers Carmen $2,000 if she promises not to pursue her potentiallegal claim against Dex. Carmen agrees. Later, Carmen discovers that it willcost $1,500 to repair her car and $4,000 to cover the medical expenses for alatent injury. Refer to Fact Pattern 10-2. The agreement between Dex and Carmen is

a. a covenant not to sue.

b. an accord and satisfaction.

c. a release.

d. promissory estoppel.

Cherry and Basil are minors who marry each other. Their minority statusmay be terminated under the laws of

a. all states.

b. most states.

c. some states.

d. no states.

Cielo is fifteen. In most states, Cielo would be considered a minorbecause she is under the age of

a. sixteen.

b. eighteen.

c. twenty.

d. twenty-one.

Intoxicated but fully aware of the consequences,Uri agrees to a two-year cell-phone service contract with Wander Talk, Inc., atmore than the average market price. This contract is

a. enforceable.

b. not enforceable because contracting parties can change their minds.

c. not enforceable because the contract clearly favors Wander Talk.

d. not enforceable because Uri was intoxicated when he agreed to it.

A court adjudicates Huck mentally incompetent andappoints Inez to be his guard­ian. Later, without Inez’s knowledge, Huck signsa contract to sell his farm to Kyle for its real market value. The contract is

a. enforceable if Huck comprehended the consequences.

b. enforceable if Huck knew the market value of the farm.

c. enforceable if Huck was the record owner of the farm.

d. void.

Neil represents himself as acontractor in Ohio, but he is not licensed in that state. A contract betweenPam and Neil by which Neil agrees to build a warehouse for Pam in Ohio is

a. enforceable only if Pam does not object after learning of Neil's status.

b. enforceable only if Pam knows that Neil is unlicensed.

c. enforceable only if the outcome is successful.

d. not enforceable.

A contract between Donald and Chloe to leasecommercial property contains an ex­cul­patory clause. This clause is

a. enforceable as a matter of public policy.

b. enforceable if either part is in a business important to the public.

c. enforceable if an event occurs to which the clause applies.

d. generally unenforceable.

Cross-CountryTrucking Company contracts with Baldwin to transport crated goods to a certaindestination for $5,000. Cross-Country delivers the crates, but Baldwin does notpay. Cross-Country learns that the crates contained stolen goods. Cross-Countrycan

a. do nothing with respect to the contract.

b. recover $5,000 from Baldwin.

c. recover the goods but not the $5,000 from Baldwin.

d. recover the goods for $5,000 from Baldwin.

Mike and Nora make promises to each other.Contract law shows to what extent society allows persons to make promises that

a. are legally binding.

b. constitute moral obligations.

c. exist only between members of the same family.

d. none of the above.

Al and Ben enter into a contract for the sale of awarehouse. Al promises to vacate the property, and Ben promises to pay, on July1. Later, Al promises to take Sue out for lunch. The common law of contractsassures these par­ties of compliance with

a. all of the promises.

b. some of the promises.

c. none of the promises.

d. none of the above.

Jill makes a promise to Ken. Ken is

a. a promisee.

b. a promiseer.

c. a promisor.

d. a promissory.

Michelle contracts to tutor Paul in the principlesof business law. For the breach of a contractual promise, contract law entitlesinnocent parties to

a. any sort of relief that a court wants to provide.

b. no relief.

c. some forms of relief.

d. none of the above.

Mary asserts that any contract she entered intowith Nick is unenforceable. Defenses to the enforcement of a contract include

a. only improper form.

b. only the lack of a party's genuine assent.

c. improper form and the lack of a party's genuine assent.

d. none of the above.

Jim offers to buy Karen’s car for $1,000. Jim isan offeror and

a. an obligator.

b. an offeree.

c. a promisee.

d. a promisor.

Fran and Greg enter into a bilateral contract, which is created when

a. Fran gives a promise in exchange for Greg's performance of a particular act.

b. Fran gives a promise in exchange for Greg's promise.

c. either a or b.

d. none of the above.

John offers to pay Mary $100 if she walks across the Brooklyn Bridge.Mary can accept the offer only by walking across the bridge. If Mary walksacross the bridge, she and John will have formed

a. a bilateral contract.

b. a unilateral contract.

c. a performance contract.

d. a surety contract.

Hugo calls Irma on the telephone and offers to buyIrma’s textbooks from the previous semester for $55. Irma agrees. Hugo and Irmahave

a. an express contract.

b. an implied-in-fact contract.

c. an implied-in-law contract.

d. a quasi contract.

Kate begins to perform, intending that thecompletion of her performance act as an acceptance of Lyle’s offer. Under themodern-day view, an offer that can only be accepted by completion of a specificact can

a. be revoked any time after the offer is made.

b. be revoked any time before the completion of performance.

c. not be revoked once performance has substantially begun.

d. no be revoked once the promisee indicates he or she will perform.

John agrees to deliver 144 hard drives to Paul’sComputer Store. John de­livers but Paul does not pay. To recover the price,John can collect from Paul on the basis of their

a. implied-i-fact contract.

b. quasi contract.

c. express contract.

d. none of the above.

Betty visits a grocery store in which she has anopen account, holds up an apple so that the clerk can see it, acknowledges theclerk’s nod, and pockets the apple knowing that she will be billed for it atthe end of the month. Betty has formed

a. an implied-in-fact contract.

b. a quasi contract.

c. a bilateral contract.

d. a unilateral contract.

Gwen claims that she and Hal entered into animplied-in-fact contract. To establish this contract, it not necessary to show

a. that Gwen furnished Hal with services or property.

b. that Gwen expected she would be paid for providingservices or prop­erty and Hal knew that she expected payment.

c. that Hal failed to eject the services or property even though he had ample opportunity to do so.

d. that a court imposed a fictional promise in the interest of fairness and justice.

Abby and Bill enter into an implied-in-fact contract. Under thiscontract, the conduct of the parties is examined

a. only to define the contract's terms.

b. only to determine whether they intended to form a contract.

c. to define the contract's terms and to determine whether the parties intended to form a contract.

d. none of the above.

Alec, a physician, renders aid to Bart, who is injuredand unconscious. Alec can recover the cost of the aid from Bart

a. only if Bart was aware of the aid.

b. only if Bart was not aware of the aid.

c. even if Bart was not aware of the aid.

d. none of the above.

Fred and Ethyl sign a contract in which Fredagrees to deliver heating oil in exchange for Ethyl’s promise to pay for theoil. Fred delivers the oil. The contract is

a. fully executed.

b. executory on the part of Fred.

c. executory on the part of Ethyl.

d. none of the above.

Beth claims that her contract with Carl isvoidable. If the contract is avoided

a. both parties are released from it.

b. neither party is released from it.

c. only Beth is released from it.

d. only Carl is released from it.

Sam announces that he plans to sell his businessat a price below its mar­ket value. Tina gives Sam a check for the statedamount. Sam

a. is bound to sell his business to Tina.

b. may refuse to accept the check, because he only expressed an intent to do something in the future.

c. may refuse to accept the check, because he only expressed an opinion as to the worth of the business.

d. may refuse to accept the check, because he only expressed a willingness to discuss a possibility of enter in into a contract.

Ed tells Dan that he would like to buy Dan’s farm.Later, Dan decides to sell the farm and sends to Ed, and others, a flyerdescribing the details. Ed responds with a letter of “acceptance.” Dan and Edhave

a. a contract if, under the circumstances, a reasonable person would believe that Dan was offering to sell the farm.

b. no contract, because Dan was only inviting bids to buy the farm.

c. no contract, because Dan sent the letter to more than one party.

d. no contract, because the letter was an invitation to negotiate.

ConsumerSales, Inc., sends its catalogue to Carol and includes a “person­alized” letterinviting her to buy any item in the catalogue at the advertised price. This

a. constitutes an offer because of the ltter.

b. constitutes an offer only if Carol previously bought items from the firm.

c. constitutes an offer because there is no room for price negotiation.

d. does not constitute an offer.

National Transport, Inc., offers to sell a truckto Local Delivery Company. Before accepting the offer, Local learns that thetruck has been sold to Midstate Trucking Corporation. National is

a. liable to Local for breach of contract.

b. liable to Midstate for breach of contract.

c. not liable, because the sale revoked the offer to Local.

d. not liable, if National offers a substitute truck to Local.

Bob offers to sell Carol his computer butconditions the sale on Carol ac­cepting the offer by May 1. Bob may revoke theoffer

Alan promises to pay Beth $500 to install a pumpin his factory. Beth com­pletes the installation. The act of installing thepump

a. imposes a moral obligation on Alan to pay Beth.

b. imposes no obligation on Alan unless he is satisfied with the job.

c. is not sufficient consideration because it is not goods or money.

d. is the consideration that creates Alan's obligation to pay Beth.

Lee promises to pay Matt, his son, $5,000 if hecompletes his college educa­tion. Matt finishes college. Lee is

a. not required to pay, because finishing college benefits Matt.

b. not required to pay, because Matt considered attending college.

c. required to pay, because Matt finished college.

d. required to pay, because college can be expensive.

Paul offers Rita $1,000 for her $5,000 computer.Rita knowingly and volun­tarily agrees to the offer but later sues Paul. Acourt would likely

a. set aside the agreement as unfair.

b. set aside the agreement because the consideration is inadequate.

c. not question the adequacy of the consideration.

d. consider such a suit to be frivolous.

Ned Contractors, Inc., begins construction of a mallfor Van Development Corporation and after six months demands an extra $100,000.Van agrees to pay. Imagine that Ned offered no reason for the extra $100,000 but said only that i would stop working if Van did not agree to pay. The agreement is

a. enforceable because the parties executed an accord and satisfaction.

b. enforceable because of the unforeseen difficulties.

c. unenforceable due to the preexisting duty rule.

d. unenforceable as an illusory promise.

Ned Contractors, Inc., begins construction of a mallfor Van Development Corporation and after six months demands an extra $100,000.Van agrees to pay. Imagine that Ned explained, as a reason for theextra $100,000, that ordinary business expenses had increased. The agree­mentis

a. enforceable because the parties executed an accord and satisfaction.

b. enforceable because of the unforeseen difficulties.

c. unenforceable due to the preexisting duty rule.

d. unenforceable as an illusory promise.

Ned Contractors, Inc., begins construction of a mallfor Van Development Corporation and after six months demands an extra $100,000.Van agrees to pay. Imagine that Ned explained, as a reason for theextra $100,000, that unforeseen soil and rock conditions would add consid­erablecosts to the project. The agreement is

a. enforceable because the parties executed an accord and satisfaction.

b. enforceable because of the unforeseen difficulties.

c. unenforceable due to the preexisting duty rule.

d. unenforceable as an illusory promise.

Ethan contracts with Ethyl to buy a ring from her. Whenboth parties change their minds, they inform each other that they would like tocancel the contract. Ethan and Ethyl

a. must perform their contract.

b. must perform the part of their contract that is still executory.

c. may rescind their contract altogether.

d. may rescind their contract to the extent that it is executory.

Ethan contracts with Ethyl to buy a ring from her. Whenboth parties change their minds, they inform each other that they would like tocancel the contract. Imagine that the next day, Ethan changes his mindand again offers to buy the ring. Ethyl is willing to sell, but for a higherprice. Ethan and Ethyl

a. must perform their original contract.

b. must perform the part of their original contract that is still executory

c. may agree to a new contract that includes the higher price.

d. may agree to a new contract, but it cannot include the higher price.

Jane promises to pay her secretary $1,000 inconsideration of the services the secretary provided over the years. Jane laterreneges on the promise. Jane is

a. liable for payment of the $1,000.

b. liable only if the promise was written.

c. not liable because the consideration is in the past.

d. not liable because the consideration is accidental.

Nancy promises to payTilly $50 a day to come work for her. Tilly agrees and quits her job. If Nancyfails to provide a job for Tilly, then Tilly will have a cause of action basedon

a. promissory estoppel.

b. the statute of limitations.

c. a covenant not to sue.

d. uncertain performance.

Sue, a minor, signs a contract to buy a computerfrom Tom, the owner of United Computer Store. Sue’s right to disaffirm thecontract

a. does not change the fact that Tom is bound by the contract.

b. does not yet exist because Sue is still a minor.

c. gives Tom, an adult, the right to disaffirm the contract.

d. is not valid because a computer is a "necessary"

Nora signs a contract to buy a car just beforereaching the age of majority. After reaching the age of majority, Nora does nottake possession or make payments. Most courts would hold that she had

a. disaffirmed the contract.

b. ratified the contract.

c. rescinded the contract.

d. none of the above.

Tony,a minor, attempts to return to its former owner, a car that he re­centlypurchased and subsequently wrecked, in a state in which a duty of restitutionis imposed. Tony

a. can return the car in its present condition and avoid any further liability.

b. is not required to return the car due to his or her minority.

c. must return the car and pay for the damage.

d. will no be able to return the car unless it can be fully restored to its original condition.

Joe is a minor. Joe has

a. the capacity to enter into a valid contract only.

b. the right to avoid liability under a contract only.

c. the capacity to enter into a valid contract and the right to avoid liability under it.

d. none of the above.

Max purchases a motorcycle while still a minor andcontinues to maintain it and operate it after reaching the age of majority.Most courts would hold that he had

a. disaffirmed the contract.

b. ratified the contract.

c. rescinded the contract.

d. none of the above.

Rick, a minor, charges groceries at a local store.Rick decides two days later that he does not want the groceries. He candisaffirm the contract

a. without returning the groceries.

b. only if he returns the groceries that have not yet been consumed.

c. only if he agrees to pay the reasonable value of the groceries he has consumed.

d. but will still be liable for the reasonable value of all the groceries.

While intoxicated, Tony contracts to buy a bicyclefor double its normal price. Regarding this contract, Tony is

a. liable even if he did not understand its legal consequences.

b. liable only if he understood its legal consequences.

c. not liable because the contract obviously favors the other party.

d. not liable under any circumstances.

Whileintoxicated, Steve agrees to a contract to sell his restaurant to Tina. Thiscontract would be considered void

a. if Steve appeared intoxicated to Tina.

b. if Steve were so intoxicated as to have no memory of the deal.

c. under any circumstances.

d. under no circumstances.

Linda is adjudicated incompetent by a court and aguardian is appointed. Linda subsequently buys a new car. The contract is

a. binding and enforceable.

b. binding and enforceable to the extent that the car i a "necessary."

c. unenforceable because persons declared to be mentally incompetent are not permitted to drive cars.

d. void.

Jay is mentally incompetent but has not been soadjudged by a court. Any contract Jay enters into is voidable

a. only if he does not know he is entering into the contract.

b. only if he lacks the mental capacity to comprehend the consequences.

c. if the either does not know it is a contract or does not comprehend the consequences.

d. none of the above.

Bill and Carol attend a hockey game at whichgambling is illegal and make a bet on the outcome of the game. Carol’s decisionto withdraw from the wager in the third period is

a. not valid because it is too late in the game.

b. not valid unless Carol's team was ahead when she withdrew from the wager.

c. not valid without Bill's consent.

d. valid.

Mikeobtains a consumer loan from a bank at an interest rate of 35 percent. The bankhas

a. obviously decided that Mike is a poor credit risk.

b. probably violated the usury laws.

c. unlawfully engaged in a restraint of trade.

d. none of the above.

Nick represents himself as a contractor in Ohio,but he is not licensed in that state. A contract between Pat and Nick by whichNick agrees to build a warehouse for Pat in Ohio is

a. enforceable only if Pat does not object after learning of Nick's status.

b. enforceable only if Pat knows that Nick is unlicensed.

c. enforceable only if the outcome is successful.

d. not enforceable.

Ron is a real estate broker licensed only inCalifornia. Ron concludes a sale in Nevada. Ron can successfully sue to

a. collect the commission only.

b. keep the commission only if it has already been paid.

c. collect or keep the commission.

d. none of the above.

Owen signs a covenant not to compete with hisemployer, Peak Sales Company. A court decides that the covenant is overlyrestrictive. The court will likely

a. enforce it as written so as not to interfere with the parties' freedom of contract.

b. enforce it but evaluate its effects over time.

c. reform its terms to prevent any undue burdens.

d. refuse to enforce it unless Peak pays additional consideration.

Lora signs a covenant not to compete with heremployer, Midstate Distribu­tion, Inc. The covenant will be enforced if it

a. does not require either party to obtain a business license.

b. is reasonable with respect to geographic area and time.

c. is supported by consideration.

d. none of the above.

A contract between Kim and Larry to lease realproperty contains an excul­patory clause. This clause is

a. enforceable only if either party is in a business important to the public interest.

b. enforceable only if the lease involves residential property.

c. generally enforceable as a matter of public policy.

d. none of the above.

Bobruns an illegal business and pays Carl, a law enforcement officer, not tointerfere. The payments are discovered. Bob and Carl are sent to prison. Bobcan successfully sue Carl for the return of

a. only the money paid to Carl that Carl has not spent.

b. only the money paid to Carl that Carl has spent.

c. all of the money paid to Carl.

d. none of the above.

The elements of a contract do not include

a. consideration.

b. contractual capacity.

c. legality.

d. practicality.

The intent to enter into a contract is determined with reference to

a. the conscious theory of contracts.

b. the objective theory of contracts.

c. the personal theory of contracts.

d. the subjective theory of contracts.

In deciding whether a valid contract was formed, a court will not look at

a. the circumstances surrounding the alleged contract.

b. the parties' conduct at the time of the alleged contract.

c. the parties' statements at the time of the alleged on tract.

d. the parties' subjective beliefs at the time of the alleged contract.

A bilateral contract is created when a promise is given in exchange for a

a. payment of money only.

b. performance of a particular act only.

c. promise only.

d. prudent awareness only.

The categories contracts are placed involve legal distinctions as to

a. enforceability only.

b. formation only.

c. performance only.

d. enforceability, formation, and performance.

Kate begins to perform, intending that the completion of her performance will be an acceptance of Lyle's offer. Under the modern-day view, an offer that can only be accepted by completion of a specific act can

a. be revoked any time after the offer is made.

b. be revoked any time before the completion of performance.

c. not be revoked once performance has substantially begun.

d. not be revoked once the promisee indicates he or she will perform.

Jay tells Kim that he will buy her law book from last semester for $80. Kim agrees. Jay and Kim have

a. an express contract.

b. an implied-in-fact contract.

c. an implied-in-law contract.

d. a quasi contract.

Jolly Sales Company and Kwik Distributors, Inc., enter into an agreement that contains some express terms and some that are implied. This is

a. a mixture of an express contract and an implied-in-fact contract.

b. an express contract only.

c. an implied-in-law contract.

d. not a contract.

Sam and Tiffany enter into an implied-in-fact contract. The parties' conduct

a. defines the contract's terms.

b. finds the contract's facts.

c. terminates any unintended consequences.

d. undercuts ay terms based on the facts

Ann promises to buy a house from Ben for $200,000. Ben promises to vacate the property on July 1. If these promises are in writing, they are most likely

a. enforceable.

b. unenforceable.

c. void.

d. voidable.

Federal Oil Company and Great Apartments, Inc. sign a contract in which Federal agrees to deliver heating oil in exchange for Great's promise to pay for it. Federal delivers the oil. The contract is

a. executory on the part of Federal.

b. executory on the part of Great.

c. fully executed.

d. neither executed nor executory on the part of either party.

Alex, a physician, renders aid to Burt, who is injured and unconscious. Alex can recover the cost of the aid from Burt

a. even if Burt was not aware of the aid.

b. only if Burt recovers because of the aid.

c. only if Burt was aware of the aid.

d. under no circumstances.

A judge can apply the doctrine of quasi contract to a dispute

a. only if there is a valid contract covering the area in question.

b. only if there is not a valid contract covering the area in question.

c. whether or not there is a valid contract covering the area in question.

d. under no circumstances.

Under the plain meaning rule, the meaning of a contract must be determined by reference to

a. any available evidence.

b. any relevant extrinsic evidence.

c. the face of the instrument.

d. the later testimony of the parties.

Eve and Frank enter an express contract for the construction of an office building. Express contract terms are given

a. less priority than the parties' prior dealing.

b. less priority than the trade usage in that particular industry.

c. less priority than the parties' course of performance.

d. greater weight than the prior dealing, course of performance, or trade usage

Nora enters into a contract with Owen's Transport Company for the delivery of a shipment of fresh produce. If ambiguities appear in the contract, they will be construed against

a. the party who drafted the contract.

b. the party with the greater bargaining power.

c the promisor.

d. the promisee.

Standard Insurer, Inc., insures Techno Corporation's assets under a policy that states any "modification" must be approved by Standard and signed by Techno's president. In renewing the policy, Standard insists on a "Modification" excluding coverage for terrorist acts. A Techno employee signs the modification. If a terrorist act occurs

a. Standard must pay Techno because the modification does not meet the policy's conditions.

b. Standard must pay Techno because the policy predates the modification.

c. Techno must suffer the loss because the modification meets the policy's conditions.

d. Techno must suffer the loss because the policy predates the modification.

An officer of International Sales Corporation meets with a representative of Global Distribution, Inc., regarding a business deal. Under the object theory of contracts, the officer's words and conduct are held to mean whatever

a. the officer subjectively intended them to mean.

b. a reasonable person in the officer's position would think they meant.

c. a reasonable person in the representative's position would think they meant.

d. the representative subjectively thought they meant.

Local Delivery Service, Inc., offers to deliver computers to Micro Store's customers for a certain price. Local's intent to extend a serious offer to Micro is determined by reference to Local's

a. assumptions.

b. beliefs.

c. intentions.

d. words and conduct.

In Lucy v. Zehmer, assume that there had been reliable testimony at trial establishing the following facts: Before presenting his hand-written contract of sale to Lucy, Mr. Zehmer privately asked his wife to sign the writing. When she hesitated, Mr. Zehmer said, "Oh go ahead and sign it. It's just a joke on Lucy, is all," IF those facts had been established in the trial record, would it have been appropriate for the Supreme Court of Virginia to affirm, rather than reverse, the trial court's judgment in favor of Zehmer?

a. No, because Zehmer's words and conduct with Lucy still could be reasonably interpreted by Lucy to indicate that he intended to sell the house to Lucy.

b. Yes, because the conversation between Mr. and Mrs. Zehmer indicates that Mr. Zehmer never intended to enter into the contract.

c. No, because Zehmer's words to his wife are inadmissible as hearsay.

d. Yes, because Lucy should have known that Zehmer was not serious about the offer.

Owen announces that he plans to sell his business, Payroll Service Company (PSC), at a price below is market value. Qualit Bookkeeping, Inc., gives Owen a check for the stated amount. Owen

a. is bound to sell PSC to Quality Bookkeeping.

b. may refuse to accept the check because he only expressed an intent to do something in the future.

c. must accept the check because he expressed an opinion as to the worth of the business.

d. must accept the check, because he expressed a willingness to discuss a possibility of entering into a potential contract.

Royal Properties, Inc., mails flyers to hundreds of firms, advertising a building for sale. Standard Manufacturing Company responds by saying, "We accept your offer." Between Royal and Standard, there is

a. a contract for the sale of the building.

b. an offer by Royal Property.

c. a contract to negotiate a sale of the building.

d. an invitation to make an offer by Royal Property.

Chuck decies to try to sell his vintage cars in an auction "with reserve." If Chuck changes his mind, he can withdraw his cars

a. only before the auction begins.

b. anytime before the auctioneer announces that the cars are sold.

c. only before the auctioneer delivers the cars to the buyers.

d. only after the auction.

Ed advertises a reward for the return of his lost dog. Flo, who does not know of the reward, finds and returns the dog. Flo cannot now recover the reward because she

a. did not confer a benefit on Ed by returning the dog.

b. did not know of the reward when she returned the dog.

c. does not need the money.

d. returned the dog.

Quality Vehicles, Inc., offers to sell a true to Regional Delivery Company. Before accepting the offer, Regional learns that the truck has been sold to State Trucking, Inc. Quality is

a. liable to Regional for breach of contract.

b. liable to State for breach of contract.

c. not liable, because the sale revoked the offer to Regional.

d. not liable, if Quality offers a substitute truck to Regional.

Bob offers to sell Carol his computer but conditions the sale on Carol accepting the offer by May 1. Bob may revoke the offer

a. before Carol accepts the offer.

b. before May 1, even if Carol has accepted the offer.

c. only after Carol accepts the offer.

d. only after May 1

TOpp Properties, Inc. (TPI), offers to sell its warehouse to U-Store-It Center for a certain price. This offer is irrevocable

a. if there are no other potential buyers.

b. if TPI does not advertise the offer generally.

c. if U-Store-It pays to have the offer held open.

d. under no circumstances.

State Trucking Company mails to Transport Delivery, Inc., an offer to sell a delivery truck and to hold the offer open for five days. The five-day period begins to run when the offer is

a. in transit.

b. received.

c. sent.

d. written.

Ace Sales Corporation plans to move to a new office. Ace offers to sell its office furniture to Beta Marketing, Inc., but does not specify a time for Beta to respond. The offer expires

Bill offers to sell his Consumer Service Center business to Dina for $100,000. Dina replies, "The price is too high. I will only buy it for $90,000." Dina has

a. accepted the offer.

b. made a counteroffer without rejecting the offer.

c. rejected the offer and made a counteroffer.

d. rejected the offer without making a counteroffer.

Kim sends a offer to Leo to cut down and remove a tree for $400. Kim says, "If you say oohing, I will consider you to have accepted my offer." If Leo does not respond, he will be deemed to

a. accept the offer.

b. make a counteroffer.

c. reject the offer.

d. have a contract.

Tom offers to sell United Produce Company a boxcar load of tomatoes. The offer is sent via Federal Express overnight because an acceptance is required urgently. It would be most reasonable for Untited to accept via

a. Keith intll to Tom within two weeks.

b. a fax sent to Tom as soon as the offer is received.

c. a letter mailed to Tom two days later.

d. a phone call to Tom two weeks later.

Andy offers to sell Barb ten computers for her office. Barb sends a rejection first, then later changes her mind and sends an acceptance. Whether they have a contract is determined by

a. Barb's rejection.

b. Barb's acceptance.

c. whether Barb's rejection or acceptance is received first.

d. mailbox rule.

Alan promises to pay Beth $500 to install a pump in his factory. Beth completes the installation. The act of installing the pump

a. imposes a moral obligation on Alan to pay Beth.

b. imposes no obligation on Alan unless he is satisfied with the job.

c. is not sufficient consideration because it is not goods or money.

d. is the consideration that creates Alan's obligation to pay Beth.

Don wants to exchange his performance for Earl's promise. As consideration, performance that is legally sufficient may consist of

a. an ac only.

b. a forbearance from an ac only.

c. an act or a forbearance from an act.

d. any illegal performance.

Ida promises to pay Jon, her son, $15,000 if he obtains his degree at Kappa University, where he is currently in his second year. Jon graduates. Ida is

a. not required to pay, because Jon was already at Kappa.

b. not required to pay, because obtaining a degree benefits Jon.

c. required to pay, because a job can be hard to find after college.

d. required to pay, because Jon obtained a degree at Kappa.

Bob defends against a breach-of-contract suit by Ace Credit Corporation by claiming that the consideration for their contract was inadequate. Inadequate consideration may indicate

a. fraud only.

b. duress or undue influence only.

c. fraud, duress, or undue influence.

d. none of the above.

ALpha, Inc., defends against a breach-of-contract suit by Beta Corporatioin by claiming that the consideration for their contract was inadequate. A court will not normally evaluate the adequacy of consideration unless it is

a. fairly unbalanced.

b. grossly (shockingly) inadequate.

c. negligently unreasonable.

d. willfully unfair.

Paul offers Rita $1,000 for her $5,000 computer. Rita knowingly and voluntarily agrees to the offer but later sues Paul to get her computer back. A court would likely

a. set aside the agreement as unfair.

b. set aside the agreement because the consideration is inadequate.

c. not question the adequacy of the consideration.

d. consider such a suit to be inadequate.

A court will generally not examine the adequacy of consideration so long as

a. it is obvious that the consideration was adequate.

b. one of the parties claimed that there was adequate consideration.

c. something of value has passed between the parties.

d. the consideration was worth more than $100.

Central Construction Compny (CCC) begins building a restaurant for Diners Cafe Corporation, but after two months demands an extra $100,000. Diners agrees to pay. If CCC offers no reason for the extra $100,000, but says only that it will otherwise stop construction, the agreement is

a. enforceable as an accord and satisfaction.

b. enforceable because of unforeseen difficulties.

c. unenforceable as an illusory promise.

d. unenforceable due to the preexisting duty rule.

Central Construction Compny (CCC) begins building a restaurant for Diners Cafe Corporation, but after two months demands an extra $100,000. Diners agrees to pay. If CC offers, as a reason for the extra $100,000, that ordinary business expenses have increased, the agreement is

a. enforceable as an accord and satisfaction.

b. enforceable because of unforeseen difficulties.

c. unenforceable as an illusory promise.

d. unenforceable due to the preexisting duty rule.

Central Construction Compny (CCC) begins building a restaurant for Diners Cafe Corporation, but after two months demands an extra $100,000. Diners agrees to pay. If CCC offers, as a reason for the extra $100,000, that extraordinary unforeseen difficulties will add considerable cost to the project, the agreement is

a. enforceable as an accord and satisfaction.

b. enforceable because of unforeseen difficulties.

c. unenforceable as an illusory promise.

d. unenforceable due to the preexisting duty rule.

National Business Company and One-State Sales, Inc., agree to simultaneously rescind their contract and enter into a new agreement under which their duties are the same. National later sues One-State to enforce the new agreement. The court

a. may apply the preexisting rule or allow the rescission.

b. must allow the recession.

c. must apply the preexisting duty rule.

d. must not apply the preexisting rule or allow the recession.

MicroCorp hires Nick to work for one month at a weekly salary of $400. A MicroCorp representative orally agrees two weeks later to double Nick's salary. This agreement is

a. enforceable because an employment contract is an adhesion contract.

b. enforceable because the parties have executed an accord and satisfaction.

c. unenforceable because Nick has incurred no additional detriment in exchange for MicroCorp's promise.

d. unenforceable because Nick's performance is uncertain.

Mary promises to pay her assistant Ned $10,000 in consideration of the services he provided over the past years. Mary never pays Ned. Mary is

a. liable for payment of the $10,000.

b. liable only if Ned still works for Mary.

c. not liable, because the consideration is in the past.

d. not liable, because the consideration was unintentional.

Gamma Corporation promises to pay its employees a year-end bonus "if management thinks it is warranted." This is

a. an enforceable contract.

b. an illusory contract.

c. an unconscionable contract.

d. a unilateral contract.

Best Goods Company promises to pay its employee a bonus for work that they did the previous year. If Best fails to pay the bonus and the employees sue, the court will likely hold that the promise

a. is enforceable because an employer has a moral obligation to do right by its employees.

b. is enforceable because it is supported by an event that has already taken place.

c. is enforceable because the promisor received no subsequent material benefit and the promisee rendered no subsequent services.

d. is unenforceable for lack of consideration.

Ann is injured in an accident caused by Bob. Bob agrees to pay Ann $2,500 if she agrees to release Bob from further liability. Ann agrees. If Ann's damages ultimately exceed $2,500, Ann can

a. collect the balance from Bob in a breach-of-contract suit.

b. collect the balance from Bob in a tort suit.

c. collect the balance from Bob on the ground of unforeseen difficulties.

d. not collect the balance from Bob.

After an accident with a driver for General Transport Company (GTC), Paul signs a covenant not to sue TC for damages in a tort action if it pays for the damage to his car. This covenant

a. bars recovery only if GTC pays.

b. is an illusory contract.

c. is barred by the preexisting duty rule.

d. is unconscionable.

Auto Body Repair Shop (ABRS) promises to pay Ben $1,000 a week to work for ABRS. Ben accepts and sits his job with Car Care Service. ABRS fails to provide a job for Ben. Ben has a cause of action based on

a. an illusory promise.

b. a release.

c. past consideration.

d. promissory estoppel

Betty pledges to donate $1,000 to the Children's Hospital. On the basis of the pledge, the hospital orders additional equipment. Betty reneges on the pledge. The hospital sues Betty. If the court enforces the pledge, it will be

a. because Betty's performance is unforeseen difficulties.

c. because the pledge is a gift.

d. under the doctrine of promissory estoppel.

Don enters into a contract with Edie, who does not have contractual capacity. The law will permit Don to enforce the contract only if Edie

a. elects not to avoid the contract.

b. is a minor.

c. is a minor, intoxicated, or mentally incompetent.

d. is intoxicated or mentally incompetent.

Chris, a mior, signs a contract to purchase alcoholic beverages for Dine & Drink, his parents' restaurant. The contract is

a. valid but may be disaffirmed.

b. valid but may not be disaffirmed.

c. void as a matter of law.

d. void unless it is also signed by Ed, the manager of Dine & Drink.

Sue, a minor, signs a contract to buy a computer from Tom, the owner of United Computer Store. Sue's right to disaffirm the contract

a. does not change the fact that Tom is bound by the contract.

b. does not yet exist because Sue is still a minor.

c. gives Tom, an adult, the right to disaffirm the contract.

d. is not valid because a computer is a "necessary."

Nora signs a contract to buy a car just before reaching the age of majority. After reaching the age of majority, Nora does not take possession or make payments. Most courts would hold that she had

a. disaffirmed the contract.

b. executed the contract.

c. ratified the contract.

d. rescinded the contract.

Gina, a minor, enters into a contract to buy a tractor from Herb, an adult. If the deal is set aside, restoring Herb to his original position prior to the contract, it would be

a. ratification.

b. emancipation.

c. disaffirmance.

d. restitution.

Ruth, a minor, charges groceries at Sam's Mart. Two days later, Ruth disaffirms the purchase. Ruth will owe Sam's Mart

a. the reasonable value of the groceries.

b. the retail value of the groceries.

c. the wholesale value of the groceries.

d. nothing.

Al, a minor who is under his parents' care and control, signs a contract to rent an apartment from Bob for one year. Before the end of the term, Al moves out. Bob sues for the rent for the rest of the term. Al can

a. avoid liability for the rent but not disaffirm the contract.

b. disaffirm the contract and avoid liability for the rent.

c. disaffirm the contract but not avoid liability for the rent.

d. not disaffirm the contract nor avoid liability for the rent.

Curt, a doctor, renders medical care to Dora, a minor. A contract between Curt and Dora is

a. express

b. implied in fact.

c. implied in law.

d. non-existent.

Beth enters into, and fails to disaffirm soon after reaching the age of majority a contract with Computer Stores, Inc. When Beth later attempts to disaffirm the contract, Computer Stores files a suit against her. The court will consider th contract ratified if it is

a. executed.

b. executory.

c. executed or executory.

d. none of the above.

While intoxicated, Tim contracts to buy a bicycle for double its normal price. Regarding this contract, Tim is

a. liable even if he did not understand its legal consequences.

b. liable only if he understood its legal consequences.

c. not liable because the contract obviously favors the other party.

d. not liable under any circumstances.

Jay is mentally incompetent but has not been so adjudged by a court. An contract Jay enters into is voidable

a. only if he does not know he is entering into the contract.

b. only if he lacks the mental capacity to comprehend the consequences.

c. if he either does not know it is a contract or does not comprehend the consequences.

d. if he is adjudicated insane.

Joy signs a contract with Kent, an unlicensed physician, to perform a medical procedure. This contract is enforceable by

a. Joy only.

b. Joy or Kent.

c. Kent only.

d. no one.

Owen signs a covenant not to compete with his employer, Peak Sales Company. A court decides that the covenant is overly restrictive. The court will likely

a. enforce it as written so as not to interfere with the parties' freedom of contract.

b. enforce it but evaluate its effects over time.

c. reform its terms to prevent any undue burdens.

d. refuse to enforce it unless Peak pays additional consideration.

A contract between Lou and Val requires a transfer of stolen goods for counterfeit currency. This contract is

a. enforceable.

b. void.

c. voidable at the option of either party.

d. voidable at the option of the party having less bargaining power.

Cathy assures Don that she will deliver his products as he directs. An assurance that one will do something in the future is part of the definition of

a. a declaration.

b. a moral obligation.

c. an ethical principle.

d. a promise.

Jane offers to pay Kyle $500 if he jogs across the Golden Gate Bridge. Kyle can accept the offer only by jogging across the bridge. If Kyle jogs across the bridge, he and Jane will have formed

a. a bilateral contract.

b. a moral obligation.

c. a social contract.

d. a unilateral contract.

Macro Corporation and Micro, Inc., enter into an agreement. To constitute a contract

a. all terms must be express.

b. all terms must be implied.

c. the terms may be express, implied, or a mix of both.

d. the terms may be express or implied, but not both.

Tom enters a coffee shop in which he has an open account, fills a cup of coffee, holds it so the cashier can see it, acknowledges the cashier's nod, and walks out with the coffee, knowing that he will be billed for it at the end of the month. Tom has formed

a. an express contract.

b. an implied-in-fact contract.

c. an implied-in-law contract.

d. a quasi contract.

A quasi contract is imposed by the court to

a. avoid the unjust enrichment of one party at the expense of the other.

b. punish the failure of one party to honor a moral obligation to the other.

c. reward the semi-contractual conduct of one party toward the other.

d. sanction the non-contractual behavior of one party toward the other.

Cory enters into a contract with Diane to act as her personal trainer. If they later have a dispute over the terms of the contract, the rules of interpretation will give effect to

a. the parties' intent as expressed in their contract.

b. what the defendant claims was the parties' subjective intent.

c. what the plaintiff claims was her intent

d. what each o the parties agrees to as subjective intent.

Mick sues Keith for allegedly breaching a contract to paint Mick's house. Mick's complaint says that the contract was entered into after a long conversation one night at a bar during which Keith kept asking for one of Mick's old Chuck Berry records. Keith claims there was no contract because he thought, subjectively, the conversation was a joke; and he, Keith, ahd no real intention to enter into a contract to paint Mick's house. Based on the reasoning in Lucy v. Zehmer, when determining whether Keith intended to enter into an agreement, the court will probably give the greatest weight to

a. Keith's testimony regarding his subjective intent.

b. the testimony of others regarding Keith's subjective intent.

c. objective intent of Keith's words and conduct and the circumstances of their conversation.

d. the market value of the Chuck Berry record.

Kit offers to sell her boat to Liu. Liu accepts. Unknown to Kit, Liu builds a dock for the boat. Kit attempts to revoke the offer. Kit's attempt will be

a. effective because Kit did not build the dock.

b. effective because Kit did to know that Liu would build a dock.

c. ineffective because Liu justifiably relied on Kit's offer.

d. ineffective because Liu and Kit have a contract.

Mike offers to sell Nora a warehouse. This offer is irrevocable

a. if Mike does not advertise the offer generally.

b. if Nora pays to have the offer held open.

c. if there are no other potential buyers.

d. under no circumstances

Eve tells Frank that she will pay Frank $50 if he unloads her truck. Frank starts to unload the truck. Frank's acceptance will be complete

a. as soon as Frank says he will unload the truck.

b. once Frank starts to unload the truck.

c. only after Frank unloads the truck.

d. when Frank hears Eve's offer.

Harry promises to pay Larry not to park in a no-parking zone in front of Harry's house. The agreement is

a. enforceable because Larry is giving up the right to do something that he would otherwise do in the absence of the agreement.

b. enforceable because the agreement accomplishes Larry's goal that the no-parking zone in front of his house be kept clar.

c. not enforceable because Larry has no legal right to park in the no-parking zone.

d. not enforceable because the no-arking zone is owned by the city.

Mei writes a check to Nat in an amount that represents half of her debt to him. On the back of the check, Mei includes the words "payment in full." Nat cashes the check. This discharges the entire debt

a. if the debt is liquidated.

b. if the debt is past due.

c. if the debt is unliquidated.

d. under no circumstances

George ad Holly disagree as to the exact amount one owes the other. They form a new agreement that, on fulfillment, will discharge the prior obligation. This is

a. a covenant not to sue.

b. an accord and satisfaction.

c. a release.

d. promissory estoppel.

Milo files a suit against National Corporation under the doctrine of promissory estoppel. Milo must show that

a. Milo justifiably refused to fulfill a promise to National.

b. Milo justifiably relied on National's promise to his detriment.

c. National justifiably refused to fulfill a promise to Milo.

d. National justifiably relied on Milo's promise to its detriment.

Rita, a minor, signs a contract to buy a sport utility vehicle (SUV) by misrepresenting her age to be twenty-one. In a majority of states, Rita may

a. disaffirm the contract.

b. disaffirm the contract only if she first makes full payment.

c. disaffirm the contract only if she returns the SUV in original condition.

d. not disaffirm the oontract.

Jill, a minor, is living at home with her parents, but signs a lease with a landlord to rent an apartment. Jill can

a. disaffirm the lease because her parents can be held liable for it.

b. disaffirm the lease.

c. not disaffirm the else because an apartment is not a "necessary."

d. not disaffirm the lease if she intended to live on her own.

WHile a minor, Jason buys a car that he continues to use and make payments on after reaching the age of majority. Jason has

a. disaffirmed the contract.

b. ratified the contract.

c. rejected the contract.

d. rescinded the contract.

A court adjudicates Holly mentally incompetent and appoints a guardian. Holly subsequently signs a contract to sell her house. The contract is